China's ghost cities - 64M vacant apartments

[True Earthling]

In the face of some reports I've read about China's homeless problems... I find this amazing. This is what happens when there's too much central planning of the economy...

These are satellite images of one of China's newest cities, a sprawling urban centre complete with public buildings, hotels and apartment blocks and this is the view from the ground. 11am on a Thursday morning and Zheng Zhou's CBD is deserted, shops unoccupied, hundreds of apartments uninhabited.

All the shops in this mall are empty, not that that worries the government, because they're simply more concerned with maintaining economic growth and one way of achieving that is building cities like this one. The big question, though, is how much longer all these shops and properties can remain vacant?

But all around me, the construction of this metropolis goes on and here in the southern city of Guong Guan, another example. This is the South China Mall - toy shop owner, Tian Yu Gao, is doing his best to keep his spirits up but is already after 2pm and he's yet to serve a single customer.
http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

edit... changed "central control" to "central planning".

[cali]

1. Is there too much central control in Florida?

[bobbolink]

4. !!

:applause:

or Colorado, or New York, or California, etc etc etc

[KamaAina]

5. DING DING DING!

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=708971&mesg_id=708971

[True Earthling]

14. Who said anything about Florida?

Obviously there were huge miscalculations on the part of legislators, regulators, banks, home builders, mortgage lenders, bond rating agencies, real estate brokers, appraisers and consumers fueled by greed, ignorance and complacency. There's plenty of blame to spread around.

[hedgehog]

15. If the real estate booms in Florida, Nevada or California were

ultimately financed by a couple large entities, (Bank of America, Chase, J P Morgan, etc.), wouldn't that be central control?

When Walmart controls so much of the market that it dictates to manufacturers how they are going to operate and where they are going to operate, isn't that central control?

[Paradoxical]

17. That would be corporatism (or fascism).

Which, while central control is present, is not the issue.

What's the issue is the capitalist theory of labor. The need to continue producing more and more in order to sustain the state.

[JVS]

82. zing!

[RollWithIt]

87. Uh, it's not really the same kind of problem? Heck, even the biggest foreclosure areas in Florida...

still don't even compare to entire cities with no population. lol.

[HEyHEY]

89. There's a difference between abandon buildings and building empty ones

[Newest Reality]

2. Am I inferring an implication by the OP here?

Hmmm. Maybe you could elucidate on what you mean by too much central control?

[True Earthling]

24. I really meant too much central "planning"

Which I changed in the OP. A city was planned and built where there was no demand or economic activity to support it.

[freshwest]

47. The OP is inferring communism, isn't it? He can answer for himself, though.

Detroit's plight was not caused by 'central control,' but rather corporations selling out and closing the factories.

Some of China is doing quite well. Here's an example of what used used to be called in the USA a 'factory town.' Except the residents who work there seem to be better off than ours were.

China's wealthiest village

http://www.youtube.com/watch?v=xJl0cLNptDs&feature=player_embedded

There is an example of a city that was overbuilt by 'central control' and abandoned:

China's Empty City: government stimulus & central planning at work

http://www.youtube.com/watch?v=E9msCpYbyPs

The message underlying perhaps is that the USA spending on infrastructure is a bad idea. The video shows that it's being held vacant is investment money.

Think about it but the problem is the same as here and not caused by government unless you consider business and government one entity there and here...

[Lasher]

3. Makes me think of all those McMansions standing empty now in the US

That wasn't caused by too much government control, but rather a lack of it.

[Paradoxical]

6. This has nothing to do with central control of the economy.

But nice try. As a democratic socialist, I appreciate the slap in the face.

[Bucky]

10. Are you suggesting that all that real estate was built up because of market demand?

I don't see it, sorry. Some central planner said "Let's build a lot of shit here" and no one was looking out for potential customers to fill it up. It's classic supply side economics, meaning "built to fail."

[Paradoxical]

11. It's a product of fascism, not socialism.

There's nothing in socialism that requires the state to continue building massive cities that no one will live in. In fact, the philosophy is quite the opposite.


No, this is much closer to corporatism than anything else.

[Bucky]

55. Requires? No. But then, there's nothing in capitalism that requries screwing labor unions.

What centralized planning inherently ends up doing, however, is creating huge pockets of inefficiency--these same kind of supply and demand gaps shown in the video--because meeting the needs of the little guy doesn't matter to the policy functionary. What matters is making the authoritarian boss happy, meeting the production goals sent down from the next bureaucrat up the chain of command. It's not all that different than the big empty grocery store shelves you'd find in Moscow in 1985.

[Paradoxical]

60. Of course there is. Capitalism functions off of surplus value.

Which means paying workers a lower wage than is necessary in order to obtain a profit from the products they make.

Capitalism necessitates inequality for workers.

[Bucky]

66. True dat. Just as planned economies function off of meeting top-down goals.

Both create economic incentives for inefficiency. The difference is that in a capitalistic society, the workers have a means for redress--like organizing into labor unions or seeking better employment elsewhere. In a command economy, the inefficiencies don't take the form of accumulating wealth--that's capitalism's sin. Command economies, because they prevail in non-democratic societies, tend to create corruption in the form of falsifying production statistics (which produce distorted supply and demand results) and thus misallocating consumer goods and primary resources to where they aren't desired.

[Paradoxical]

67. Ah so you don't believe that democratic socialism can exist.

Or syndicalism for that matter.

[Bucky]

70. I don't see it as a binary question. Technically speaking the US is an example.

There's all sorts of stuff in the US economy that's socialized (Social security, education, the military, transportation). Things would be a lot better off if a few other things were. But the balance of a healthy private sector is what creates opportunity, growth, and allows for individual initiative and innovation. I believe in a healthy balance.

[RandySF]

12. Speculation

The same reason you see empty or half-empty strip malls wherever you look.

[Bucky]

58. You've painted over a pretty important distinction.

Those half-empty strip malls only tells me we have a plutocracy that's out to screw the working class in America--suppressing wages to enhance profits so irrationally that they beat down their own customer base. But America's economy is still protected by a consumer-driven decision process. China's economy is producing these wholly empty megamalls, and totally empty apartment complexes (while adult workers live 4-5 in a single apartment) because of an centrally planned economy that is able to more effectively screw the workers.

[WinkyDink]

31. No. It was built to look good in the statistics.

[Bucky]

53. Exactly! This is the inherent problem with all command economies.

Centralized planning trumps meeting the needs of the consumers. It's the essence of supply side thinking. It doesn't matter if it comes from a central commissar or a central bank executive; top down thinking in economics always ends up screwing the little guy and eventually screwing the whole economy.

[Paradoxical]

54. That's not necessarily true.

[Bucky]

59. Look, full on socialism could work if people would only act like components in a planned economy

instead of like human beings. But any supply-driven economy has a built in flaw. The people making the decisions, whether billionaire industrialists or peoples' commissars, are not the ones whose are going to be most efficient at distributing the scarce goods among the populace. The consumers make those decisions best, based on the human propensity to buy stuff that they like if they can afford it.

[Paradoxical]

62. Your concept of the free-market is a fantasy.

"The consumers make those decisions best, based on the human propensity to buy stuff that they like if they can afford it."

Capitalism necessitates unfair treatment of workers and also requires that there is an ever growing source of production.

[Bucky]

68. The capitalism you're talking about doesn't include organized labor

I think you, like many Republicans, don't appreciate the corrective value of unionism. Both the US and China attack the working class at their own peril.

[Paradoxical]

69. Democratically organized labor is antithetical to the tenants of capitalism.

[Bucky]

71. I think you need to work on your bumpersticker slogans.

If they're too long, they can create traffic hazards.

[Bucky]

7. In class today, we were discussing causes of the Great Depression

Too much production of goods, not enough income filtering down to the working classes to justify all the debt that all that capital investment requires in order to turn a profit in the long run. Other than accumulating too much capital debt (which may be the biggest part of it all), China's basically repeating the mistakes that created the Crash of 29.

[Hannah Bell]

8. that's capitalism, not central control.

[Rex]

9. I think he meant a closed system of government.

[Paradoxical]

13. +1 I'm glad someone else "noticed" this.

[ixion]

20. China is not capitalist

by any stretch of the imagination.

[AlecBGreen]

25. you have much to learn

in many ways it is more a pure form of capitalism than America. Try living there and you will see what I mean.

[ixion]

30. Allowing the central government to pick and choose who gets to be an entrepreneur

is NOT capitalism. It's I'm afraid it's you who have much to learn.

[Paradoxical]

32. Could you define capitalism for us.

[ixion]

36. here you go

http://en.wikipedia.org/wiki/Capitalism

[Paradoxical]

39. No no no. I don't want the wiki definition. I want your definition.

I haven't been at a university for 3 years for someone to show me a wikipedia page.

[ixion]

41. I have what I call an 'old fashioned' definition of capitalism

which is: "provide a quality service or product for a fair price"

Capitalism is the ability to say: "Hey, I want to make and sell duck decoys," and then you do just that.

Oh, and I wasn't in college for 8 years so I could look up definitions for others. ;)

[Paradoxical]

44. I want to know your definition because I want to know what you're thinking.

I know what capitalism is.

[AlecBGreen]

48. that is PRECISELY what is done in China

There are far fewer barriers to entrepreneurialship in China than the US. If farmer Zhang wants to grow and sell at the market, he does so. He doesnt get a license, he doesnt apply for inspections, he doesnt have to fill out forms or provide proof of residency.

[ixion]

77. Once again I'll have to ask: cite your referencne

because that has not been my understanding of the way the Chinese government operates.

[AlecBGreen]

86. I lived there for 2 years, does that count?

There are differing rules for the big fish, but they just bribe the government (like here) and they do what they will (again, like here).

The only difference is, when the Chinese government bows to populist anger and cracks down, they shoot people who commit white collar crime.

[KurtNYC]

45. "the means of production are privately owned"

If your university thinks that is the case in China get a refund.

[Paradoxical]

49. Capitalism does not require that means of production be decentralized.

Nor does it require private ownership and operation.

[ixion]

73. well, yeah, it does

so you ought to stay in school a few more years, I guess. :rofl:

[Paradoxical]

74. No, seriously, capitalism does not necessitate decentralization or private control.

[ixion]

76. Please cite your reference for that statement

or is this your own opinion? If it's your own opinion, that's fine.

[Paradoxical]

80. You want me to give you a lesson on capitalism?

I don't have enough time. I suggest you sign up for a course in comparative government or something like that.

Telling me to cite my sources is like telling me to list every single professor I've ever had, every single project/paper I've worked on and every single book I've ever read on the subject matter.

[ixion]

81. A Lesson? From you? No, thanks...

However, if you're going to make statements that run contrary to accepted definitions, I don't believe it's asking too much to cite your reference for such a statement.

Since you have declined to cite your reference, I must assume you're just making up stuff to suit your agenda.

[Paradoxical]

83. My statements don't run contrary to accepted definitions.

That's my point.

I'm not going to post a link to wikipedia because I actually give a crap about the consistency of my knowledge. But if you really want to read about state capitalism, corporatism or fascism, you can put the names into google and they will provide you with resources.

[ixion]

92. it's funny

all the political hacks on this board have the same tone and deploy the same tactics. I really don't know why I waste my time.

[Paradoxical]

26. They are corporate fascists.

[ixion]

33. I agree... but that is not capitalism

it's corporatism.

[Paradoxical]

35. Corporatism is a form of capitalism.

[ixion]

38. I'll give you that it emerged from capitalism

and that on the surface it has some capitalistic qualities, but under the hood it's closer to fascism than capitalism.

[Paradoxical]

40. fascism is state capitalism.

[ixion]

43. lol

well, I can see you have an agenda, so I guess our conversation is at an end. Good day, sir.

[provis99]

51. you lost the argument dude. Admit it.

[ixion]

72. Uh, no, I didn't

but get on with your bad self. :eyes:

[Rex]

64. If anyone knew what your gif/jpeg was, they would relish the irony in your

statements more.

[Paradoxical]

65. Oh yeah? How so?

[Rex]

75. Killface?

Seriously?

And your username is paradoxical...brb I hear a unicorn knocking on the front door.

[Paradoxical]

79. You don't understand the joke. Clearly

[AlecBGreen]

27. +1

In the city I used to live in over there (Guiyang), there were so many housing units built on speculation it made your head spin. Many were still empty when I returned years later. It was private enterprise that built them, not the government.

[ixion]

34. private enterprise is closely tied to the central government, and basically exists

because the government allow it to exist.

[True Earthling]

42. Is this Capitalism?

I don't think so...

Gillem Tulloch is a Hong Kong-based analyst who has been investigating China's residential and commercial real estate market. He maintains that there's massive oversupply and over valuation of properties right across China.

GILLEM TULLOCH: It's essentially the modern equivalent of building pyramids. It doesn't really add to the betterment of lives, but it adds to the growth of GDP.

And maintaining economic growth is the government's number one priority.

GILLEM TULLOCH: It's basically happening because China is a command economy and the Chinese Government can dictate where the resources are spent.

REPORTER: And so, if the order goes out to build, local governments build?

GILLEM TULLOCH: That's right. If the central government a GDP target, they have to meet the target and the easiest way to do it is just to build.

REPORTER: Isn't all this construction a good thing? It's creating jobs and getting the economy moving? That's a good thing?

GILLEM TULLOCH: People forget that it is not the quantity of GDP that matters but the quality and essentially, they're building things for where there's no demand and so they're creating a large problem for the future.

http://www.sbs.com.au/dateline/story/transcript/id/601007/n/China-s-Ghost-Cities


Text

[Paradoxical]

46. "it adds to the growth of GDP." - Welcome to the point of capitalism.

[True Earthling]

50. Same goal - different system/mechanism to get there n/t

[Paradoxical]

52. Yes, a different form of capitalism to get there.

Did you watch the video?

"The mall was heralded by the New York Times as proof of China's astonishing new consumer culture"

[GSLevel9]

16. How about Florida's ghost cities?

20% of all single family homes vacant...

[madrchsod]

18. looks like china is going to explode....

i knew it was getting bad but i never knew it was this bad...

[ixion]

19. developing sprawling complexes based on an assumed "consumer culture"

is really a bad idea when you pay people a few bucks a day.

[David__77]

23. Urban per capita GDP in many Chinese cities is much higher.

If you PPP-adjust, it approximates the lower rung of developed countries. The other thing is that the central leadership wants to divert a larger fraction of total output to consumption in the next few years. It's the shift from intensive to extensive growth.

[David__77]

21. This isn't a problem at all.

This will become a bustling residential/commercial center. China is in some ways like the "wild west" of the United States during its rapid economic growth. There was growth everywhere, whole cities being created. As a public policymaker, I'd much rather deal with this problem than, say, Detroit.

[Urban Prairie]

28. Thanks for your support of the Motor (less) City!!

:(

[Paradoxical]

29. Have you seen that Eminem/Chrysler commercial for Detroit?

[David__77]

37. I didn't mean that Detroit lacks potential...

It's just a difficult situation of reorienting the local economy. I would hate to deal with that!

[Urban Prairie]

78. Yeah, so did more than half of their population over the last 50 years...heh!!

If some of the Japanese and hopefully a couple of their vehicle mfgs find that may need to move somewhere, well...we sure could use a million of 'em and esp. their businesses' vacant auto workers' jobs here, we even have some shuttered plants that they could refurbish and use.

[Bluenorthwest]

56. The cities of the American west grew to present populations

Fact is other planned cities have been built for people to come and fill, and it usually does not work out well.
You gloss over a world of specific issues with 'will become'. Where will this bustling come from? How will you deal with this problem. It will become a glorious thing is just not rational discourse, it is proclamation of an unsupported opinion, with a dig at Detroit thrown in.

[David__77]

61. There's precedent for it in China.

It's not as if China hasn't relatively successfully relocated large populations, including during the building of Three Gorges. In fact, the whole country is on the move, from countryside to city. I'm not going to write an essay, but there are examples of successful "planned cities," provided they had to proper infrastructure and mix of production. I'd be concerned about environmental questions more so. But the "bustling" will come from other cities with residents with sub-par housing due for destruction, and rural areas.

I guess I see it as an embarrassment of riches rather than some sort of failure.

[RollWithIt]

90. So basically just build a random city on the river and hope everyone moves there?

Like in the Wild West? Do you know how many thousands of towns and cities sprung up on railways in the "wild west?" You know how many of them still exist today? A fraction. You can't just build a major city in the middle of nowhere and expect it to last for no other reason than "growth."

[thelordofhell]

22. China is hiding a coming Depression

It's crashing down over there and millions will die because of it.

[HEyHEY]

91. Not crashing yet.... a few years though....

They are due for an economic depression at some point. And with the imbalance between the rich and poor in a supposedly communist country, that's going to mean big problems.

[Paradoxical]

57. "People speculating in the market have pushed prices too high" - Sound familiar?

[TNLib]

63. I was reading in my kid's "Book of World Records" China has the biggest mall in the world

and only 15 business' are set up in the mall. Just Bizarre


http://www.gadling.com/2011/03/02/largest-mall-in-the-world-is-a-chinese-ghost-town/

[Shagbark Hickory]

84. +1 +1 +! Highly recommend +1 +1 +1 Fascinating.... downright bizarre.

[Systematic Chaos]

85. This is so disgusting that I just have to give it a kick.

I'm just completely speechless over all that waste.

[HEyHEY]

88. This is nothing more than glamour projects designed to appease the public.

Granted, future planning is also invovled. But, I'll give you an example. In Shandong Province this summer I went to what will be the largest high tech park in China. They literally took 60 square Kilometers and started by laying down the roads. Now it's a bunch of roads and some empty highrises in the middle of a field. THe plan is it will be a city/high tech park. It's very strange. It's a real "If you build it they will come mentality."

As well in Shandong, I notice them using massive cranes to construct four story buildings. Again, this is to show prosperity to the locals. It's actually going to come and bite China in the behind. When the day of financial reckoning comes, and it eventually will, they will have spent all their money on these glamour projects, much like Dubai.

Problem with this country is they don't realize making cheap crap isn't a new and fantastic approach to economic growth. Chinese officials love to perpetuate the myth that their some economic geniuses, but they aren't. Much of the rest of it lies in speculation. If that doesn't come through, there's big trouble coming. This place is a massive paper tiger.

PS, I'll be in Zhengzhou Sunday to see all this for myself!!!